WTI bears attack $70.00 as Oil producers, major economics shake demand-supply matrix

WTI crude oil drops to $70.00 as the key week comprising multiple central bank events and the US inflation data begins. In doing so, the black gold fails to justify hawkish signals from Saudi Arabia and hopes of the Federal Reserve’s (Fed) no rate hike, as well as the softer US Dollar, amid expectations of the US-Iran trade deal and fears of economic slowdown.

The latest headlines from Saudi Arabia and Iran have been mixed for the Oil traders who are already struggling with the demand-supply matrix.

“The latest OPEC+ agreement involved comprehensive reform, but that the alliance was also working against ‘uncertainties and sentiment’ within the market,” said Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman on Sunday, reported Reuters.

On the other hand, Iran's supreme leader Ayatollah Ali Khamenei said on Sunday, per Reuters, “A deal with the West over Tehran's nuclear work was possible if the country's nuclear infrastructure remained intact, amid a stalemate between Tehran and Washington to revive a 2015 nuclear pact.”

It should be noted that speculation about the US-Iran trade deal triggered a slump in the Oil price the previous week before the official sources ruled out the basis and allowed the black gold to lick its wounds.

Elsewhere, fears of slower economic transition on a broader level join the fears of the US-China tension and higher yields to also prod the Oil buyers. On the same line could be the increasing odds of the US Federal Reserve’s (Fed) no rate hike in June, backed by downbeat US data, which in turn weigh on the US Dollar. Furthermore, mixed economics from China and expectations of a slower transition to growth also exert downside pressure on the WTI price.

Moving on, a slew of economics hang to entertain the Oil traders but major attention will be given to Tuesday’s US inflation and Wednesday’s Federal Open Market Committee (FOMC) monetary policy decision for clear directions. Should the US policymakers manage to defend hawks, the black gold may have more reasons to decline.

Technical analysis

Oil price grinds within an eight-day-old symmetrical triangle, currently between $69.50 and $73.00. That said, the quote’s sustained trading below the 200-bar Exponential Moving Average (EMA) on the four-hour chart keeps the Oil bears hopeful.